Industrial Market Segmentation - Bottom-up Approach (Kotler Model)

Bottom-up Approach (Kotler Model)

Kotler suggests a “build-up” approach, where masses of customer data are studied and similarities searched to make up segments that have similar needs, i.e. "assessing the customer base quantitatively and grouping them – i.e. building up – the segments based on similarities in purchasing attitude" (Kotler, 2001).

When starting the segmentation process, instead of seeing customers as identical, the build-up approach begins by viewing customer as different and then proceed to identify possible similarities between them. "In a turbulence market (pretty much all markets today), using a build-up approach is more suitable than a breakdown approach” (Freytag & Clarke, 2001).